Beauty
Personal
Care Jar
Enhance Unilever´s Beauty Culture
C.L. Huijsmans
December, 2011
Thesis Master of Science
Business Administration
Wonderful
Malaysia
Sensitivity
and Care
Looking &
Feeling good
Healthy
and Energy
Freedom;
Empower Women
Final Version
THE AUTHOR & STUDENT
Coen Huijsmans Student Number: S1908820 Master: Business Administration Specialization: Business Development
@: coenhmans@gmail.com T: +31611104117 or
+31529431378
THE PRINCIPAL Ray Guinoo
Senior Brand Manager
@: ray.guinoo@unilever.com T: +60122111936
Unilever (Malaysia) Holding Sdn. Bhd. Level 33-35, Menara TM
Jalan Patai Baru, 59200 Kuala Lumpur, Malaysia
THE SUPERVISOR CO-ASSESSOR
Prof. dr. ir. J.M.L. (Jo) van Engelen Prof. dr. ir. F.P.J. (Frans) Kuijpers
Professor, University of Groningen Professor, University of Groningen
@: jovanengelen@mac.com @: f.p.j.kuijpers@rug.nl T: +31623278110 T: +31503637234
THE INSTITUTION University of Groningen
Factulty of Economics and Business Nettelbosje 2
9747 AE Groningen The Netherlands
THE DATE
This Master Thesis is the result of my research internship at Unilever Malaysia. Writing this report has been the last hurdle in obtaining my Msc. Business Administration degree. In a few weeks from now, my life will drastically change. My (student) life is almost over and labor days with long hours are waiting ahead. However, there’s no room for sadness in this preface, so my elegy ends here.
With the aforementioned future perspective in mind, I’m very happy I faced the challenge and took the opportunity to conduct my research for Unilever in Kuala Lumpur, Malaysia. Especially during our weekend journeys to various Malaysian bounty islands, I often thought about the more boring, alternative option of doing an independent research in a library in The Netherlands.
Unilever gave me the opportunity to conduct my research abroad and I would like to thank the company supervisor Ray Guinoo for his support and interest in the subject. Furthermore, I thank all respondents of my organizational interviews for their extensive input to this study. Also a word of gratitude to all Brand Building, Customer Development and Consumer & Market Insight team members who helped me conducting the research and took me out for two-hour lunches at delicious local food stalls and restaurants. Moreover, I’m especially thankful to my University supervisor Jo van Engelen. I’m still impressed by his scientific understandings of various academic fields and his knowledgeable view on the design-oriented research. The constructive feedback sessions by telephone and email significantly contributed to my final result.
Finally, the five months I lived in Malaysia were much more special since I spent them together with Ilona. She, together with the visits of family and friends, made this period such an unforgettable time of my life with numerous valuable memories.
1. INTRODUCTION 6 1.1 Introduction to Unilever 6 1.1.1 Unilever’s vision and strategy 7 1.1.2 Malaysian Personal Care department 7
1.1.3 Fair & Lovely 8
1.2 Business Opportunity 9
2. LITERATURE STUDY 10
2.1 Introduction brand extension review 10 2.2 Extension definitions 10 2.3 Brand extension evaluation and feedback 11 2.4 Perception of fit 12 2.5 Drivers of brand extension success 13
2.5.1 Parent brand image and quality 13 2.5.2 Parent brand experience 14
2.5.3 Marketing power 14
2.5.4 Retailer acceptance 14
2.5.5 Other brand extension dimensions 15
2.5.6 Theoretical model 15
2.6 Introduction customer value review 16 2.7 Categories of value 16 2.8 Defining customer value 16 2.9 Integrative framework of CV 17
2.9.1 Value component models 17
2.9.2 Benefit-costs ratio models 18
2.9.3 Means-End Theory 18
2.10 Consumer value implications 19 2.11 Synthesize literature results 20 3. RESEARCH QUESTIONS & DESIGN 22 3.1 Research Questions 22 3.1.1 Relevant definitions 22 3.2 Research Design 23 3.3 Research process 23 3.4 Research methods 23 3.5 Primary research 24
3.5.1 Organizational In-depth interviews 24 3.5.2 Participant observation 25 3.5.3 Shelf comparisons by observations 25 3.5.4 Semi-structured shoppers interviews 26
3.6 Secondary research 27 3.7 Method of analysis 27
3.7.1 Grounded-Theory Approach 27 3.7.2 Method of analyzing primary data 27 3.7.3 Method of analyzing secondary data 28
3.8 Quality Criteria 29
3.8.1 Controllability 29
3.8.2 Reliability 29
3.8.3 Validity 30
4.1 Market analysis 31
4.1.1 Price index and best performing SKU’s 31
4.1.2 Ethnic groups 32
4.1.3 Loyal consumers 33
4.2 Retailers analysis 33
4.2.1 Average income 33
4.2.2 Brand performance among retailers 33 4.2.3 Average prices among retailers 34
4.2.4 FAL channels 34
4.3 Competitor analysis 34
4.3.1 Product ranges 34
4.3.2 Brand equity 35
4.3.3 In-store Execution 36
4.4 Unilever innovations & Hera campaign 39
4.4.1 The innovation process at Unilever 39 4.4.2 Hera Launch 360˚ Campaign 40
4.5 Beauty culture dimensions 40
4.5.1 Beauty culture in general 41 4.5.2 Beauty culture regarding Fair & Lovely 42
4.6 Conclusions and specifications 43
4.6.1 Facial skincare industry 43
4.6.2 Fair & Lovely 43
4.6.3 Beauty Culture Dimensions 44
4.6.4 Specifications 44
5. SOLUTION DESIGNS 46
5.1 Methodology of design 46 5.2 Solution Design 1: The organizational level 47
5.2.1 Practical recommendations 47
5.3 Solution Design 2: In-store execution 48
5.3.1 Shelf space and position 48
5.3.2 Illuminated shelves 49
5.3.3 Testers 49
5.3.4 Beautiful permanent secondary shelves 49
5.4 Solution Design 3: Fair & Lovely 50
5.4.1 Full product regime 50
5.4.2 Stay close to core values 52 5.4.3 Implement budget and premium line 52
5.5 Justification of Solutions 52 6. CONCLUSIONS AND LIMITATIONS 53
6.1 Conclusions 53
6.1.1 Literature and Research 53
6.1.2 Solution Designs 53
6.2 Limitations & Further research 54
6.2.1 Practical limitations 54 6.2.2 Limitation of research methods 54
6.2.3 Further Research 55
REFERENCES 55
Enhance Beauty Culture for Unilever’s Personal Care Products
Msc. BA Thesis of C.L. Huijsmans
ABSTRACT
The personal care department of Unilever Malaysia has initiated this research project. The overall purpose of the study is to become more competitive in the personal care industry. To achieve this, Unilever would like to improve on the so-called ‘Beauty Culture’ with a focus on the in-store presentation of brands. Within this scope, special attention is paid towards the case of Fair & Lovely which is a facial skincare brand that enables Malay women to get a fairer skin. The actual research is grounded in a comprehensive literature study in the field of brand extensions and customer value. This literature study contributes to existing work by proposing a model that a) combines findings of both literature streams and b) is applicable for FMCG brands in the personal care industry. The design-oriented research includes data and findings from 6 divergent sources, including (1) 8 in-depth organizational interviews, (2) 53 consumer interviews, (3) observations of 74 shelves, (4) participative organizational observations, (5) market and sales figures and (6) company documents. Data is analyzed by use of the grounded theory approach. Based on the results, a total of three sub-solutions are created. The researcher is convinced that implementing these solutions will create an environment where premium beauty products are the key to success in the future. Keywords: Brand extensions, Customer value, Unilever, Beauty products, Personal care and Malaysia.
1. INTRODUCTION
This research project is initiated by the personal care brand and marketing team of Unilever Malaysia. The team is responsible for the local brand activation of beauty products in the Malaysian market. Brand management indentified an opportunity to become more competitive by improving on the so-called ‘beauty culture’. This study can be divided into a) enhancing beauty culture on a general level (focus on Unilever personal care department) and b) applying the beauty culture for the specific brand Fair & Lovely. Results of both levels do overlap since findings on the general level can be suitable for Fair & Lovely. On the other hand, solutions for the specific case of Fair & Lovely can be applicable for other personal care brands as well.
This first chapter will elaborate on the context of the opportunity by providing an introduction to Unilever, the personal care department and the brand Fair & Lovely. Secondly, the business opportunity will be given and the final section shows the academic relevance of the study. The rest of this report is organized into six sections.
Following this introduction, a literature review on brand extensions and enhancing customer value provides a solid foundation for this study. The third section presents the research questions and elaborates on the research design. Subsequently, the results of the actual research are discussed in the opportunity diagnosis. Based on these findings, the fifth section proposes three solution designs. Finally, the conclusions and limitations of the study are outlined in the sixth and final chapter.
1.1 Introduction to Unilever
In 1930, Unilever was formed by the merger of two companies; Margarine Unie (Netherlands) and Lever Brothers (UK). It was a full business merger, operating as a single business but the two separate
legal parent companies were maintained; Unilever
NV and Unilever PLC. Equalisation agreements and contracts allows the NV and PLC to have the same directors, employers and therefore the firm can
operate as a single entity1.
Nowadays, Unilever owns more than 400 brands focused on health and wellbeing of consumers in 180 countries around the world. Every day, a total of 2 billion consumers will use a Unilever
product2. The products can be divided into four
categories; 1) savoury, dressings & spreads, 2) ice cream and beverages, 3) personal care and 4) home
care3. Together, these categories generate a annual
turnover of €44 billion and a net profit of €4,6
billion3. Unilever’s range compromises
long-established global brands like Axe, Lipton, Dove and Knorr as well as trusted, local names such as Blue Band, Suave and Fair & Lovely. Innovation is key to the success of Unilever and therefore an annual budget of nearly €1 billion is invested in research
and development3. Laboratories are established
around the world where scientists, with the knowledge about the latest consumer needs and market trends, develop new ideas, products and packages.
The research for this Master thesis will be conducted for Unilever (Malaysia) Holdings Sdn Bhd. and it focuses on the personal care market in Malaysia in which Unilever is active with int. al. the brand Fair & Lovely (FAL). Because of the scope of the project, this paragraph will limit its analysis on the part of the organization and the market that is relevant for the present research.
1.1.1 Unilever’s vision and strategy
Since Unilever’s vision is applicable for all activities worldwide, it contributes to the understanding of the way Unilever prefers to do business. Therefore, the final solution designs of this particular project should be within the scope of the following four
pillars of Unilever’s vision3:
Work to create a better future every day;
Help people feel and look good and get more out
of life with Unilever’s brands;
Inspire people to take small every actions that
can add up to big differences in the world;
Double the size of the company while reducing
our environmental impact.
Unilever has implemented a worldwide geographic area structure. The roles and
2 Unilever Annual Report and Accounts 2010 ‘Creating a better
Future every day’ (2010)
3 Introduction To Unilever, March (2011)
responsibilities are clearly divided into two global ‘categories’ and three local ‘regions’. The two categories (Food and Personal & Home care) are responsible for the brand development including the innovation, the research & development, branding proposition and the strategy of the categories on a global level. The three regions are responsible for realizing turnover and profits, introduce the right mix of brands in their specific countries and building relationships with the local customers (retail) and
consumers3. Through this structure, local teams are
able to focus on specific local consumers’ characteristics and needs in order to implement products across a wide range of national income levels. The unique combination of this local perspective and the global portfolio of powerful brands, leads to the right mix of globally supported brands that are executed according to local preferences.
More than half of Unilever’s turnover is achieved in emerging markets. The significant presence of Unilever in these countries is seen as a major relative advantage because of the huge potential of these countries. In the UK, for example, the average spend on bath and shower products per capita is $15. In emerging countries (e.g. China and India), the average spend on this category is only
$22. Taking into consideration the large populations
and the growing middle class of these emerging countries, this is a major opportunity for Unilever in the coming years.
1.1.2 Malaysian Personal Care department
Unilever Malaysia is responsible for operating and managing the brands in Malaysia, Singapore and Brunei. For research purposes, it is useful to present the structure of the Personal Care (PC) department in Malaysia. This overview provides insight into the local business operations and shows which departments can be consulted for specific parts of the research. The marketing department, and thereby consumer needs, are at the centre of the organization (see appendix A). Every action is triggered by the marketing department and is in line with the current wishes and needs of the consumers. Marketing is responsible for activating, introducing and maintaining the marketing mix of the products of a brand to local preferences. All other departments support marketing in achieving the goals. The research is initiated by the marketing department and input from the consumer market
Figure 1. FAL - Multivitamin
insight (CMI) and customer development (CD) department are required. The remaining three departments (Supply & Demand, Finance and HR) will be outside the scope of this research. A description of the these three relevant departments can be found in appendix B.
1.1.3 Fair & Lovely
As mentioned before, one part of this research project will focus on the brand Fair & Lovely (FAL) and its brand extensions. To conduct proper research on this brand, the researcher should be familiar with the brand’s identity, performance and value drivers. Furthermore, also the final recommendations and solutions should be in line with the proposition of the brand.
FAL is a leading brand in the facial whitening skincare market in Malaysia and other countries in Southeast Asia, the Middle East and Africa. In Malaysia, the brand compromises several products which can be used for cleansing, moisturizing and whitening the facial skin. The total FAL product range (presented in appendix C) generates 22 million MYR sales in 2010, of which 18 million comes from MultiVitamin moisturizer cream (figure 1). The brand is active since 1993 and has deep rooted cultural and status associations. The key message of FAL is empowering women to transform their lives and re-scripting their destiny. The root strengths of FAL are proven fairness delivery and noticeable transformation of skin colour. FAL targets women of 15-35 years who believe that her destiny by birth is not her destiny for
life. ‘She has the ability and capability to achieve beyond
her current world of
possibilities but she is limited by her lack of fairness. She knows that fairness is the edge that can make her realize her
dreams’4. More information
about the brand’s image, benefits and, value drivers can be found in brand key, presented in appendix D. The format architecture of FAL is based on three essential skin needs; prepare (cleanse skin),
4 Fair and Lovely Brand Vision Plan Year 2009-2011 (2009)
transform (core platform that delivers fairness) and enhance (a range of specialized expert products). The base variants of FAL have a price index of 105-115 compared to the average of the main competitors. Taking into account the entire facial skincare market, FAL’s products have a price index
of 645.
Issues and opportunities - FAL is the market leader
with an 27% overall share of the Malaysian facial moisturizer market (in volume) in January 2010 (see
appendix E)6. The share has been stagnant till
August 2009, but it has slid down steadily since then. With value market shares up to 60%, FAL is very strong in the traditional provision stores However, with only 5,5% share of market volume in drugstores and pharmacies (see appendix F), FAL is
underperforming in these distribution channels5.
Based on this information, one of the issues of FAL is losing volume as users are upgrading and use more expensive brands in their regime (PI of 110 and
above)5. A second issue is FAL’s
under-representation in super- and hypermarkets. Because 85% of the overall sales (in value) of skincare products is generated by pharmacies, drugstores, super- and hyper markets this is a major
opportunity for FAL6.
Project Hera and Hera Next - In August 2011,
Unilever introduced a new product into the facial skincare market which can be seen as a brand extension of the traditional FAL products. This innovation is called project Hera, which has the following key communication: ‘Get back your youthful glow, even post 30’ or the shorter version ‘Forever glow’. This extension delivers a premium fairness solution aiming the upper end of the current
FAL users with a maturing skin7. Hera is not a typical
anti-aging cream that focus on western skincare problems like wrinkles. It fights the Asian post-30 fairness skin problems like dullness, patchiness and
darkening8. The new product can a) retain existing
users, which currently switch to more sophisticated brands and b) bring in new users. By introducing Hera, Unilever can become more competitive compared the sophisticated brands, especially in the
5Q1 ’11 Category Quarterly Review, 20th April 2011 (2011) 6 Fair and Lovely Jobs to be Done (JTBD), 2011 (2010) 7 Hera IBC Kit ‘Think Big Pack’ (2010)
@ Figure 2. Fair & Lovely Forever Glow
pharmacy and drugstores channel. The pump format and the exclusive packing will drive the premium identity of the brand extension (see figure 2). Unilever is preparing more product innovations to support the Hera’s project brand extension. These products will have specific characteristics like day- and night cream, eye cream, facial masks, etc. The launch of this series is expected to be in Q1 2012 and the project name is Hera Next. After Hera and Hera Next, FAL has a complete range of products which is more premium than the current line of products. In the third quarter of 2012, Project Zara will renovate the entire current product line; by introducing a new formula (solely for the moisturizer), new graphics, a new package and a minor price increase. Basically, the brand will be slightly be elevated.
1.2 Business Opportunity
This section elaborates on the actual business opportunity which was the trigger for Unilever to conduct this research. Pharmacies and drugstores are a growing channel in Malaysia, both in value and volume. These shops sell primarily medical as well as personal care products. Though this channel sells mass brands, where Unilever strength is, it is more skewed towards medium to high-end with a very strong beauty element. The Malaysian users of
personal care products are upgrading from low to medium segment and from medium to high segment. Besides pharmacies and drugstores, the contribution of the super- and hypermarket is also increasing every year. Compared to the traditional distribution channels, the performance of Unilever within these modern channels is lacking behind. Therefore, it is of high concern that Unilever improves on its presence in these higher segment channels. Other more sophisticated brands (e.g. L’Oreal, Garnier and Olay)
score much higher than Unilever’s variants9. To
become more competitive, Unilever would like to improve on the so-called ‘Beauty Culture’ with a focus on the in-store visibility, merchandising and execution of the brands.
Fair & Lovely (FAL) is facing similar problems. As mentioned before, projects like Hera and Hera Next are initiated to improve on the brand’s beauty credentials and to become more competitive in the pharmacy and drugstore channels. The principal would like to identify elements necessary to win in these channels by strengthening the beauty credentials, culture and execution. Therefore, one part of this research will focus on these brand extensions. Findings and solutions for this particular case can be used for
other brands within the personal care range as well.
Figure 3. Growth Mix - Adapted from Ambler and Styles (1997)
2. LITERATURE STUDY
This literature study provides the theoretical foundation for the research project. Because Unilever is introducing a brand extension for Fair & Lovely, the first part of the this review will focus on the brand extensions literature. The aim of this section is to provide an overview of relevant success drivers of brand extensions in general, and for Fair & Lovely Forever Glow (project Hera and Hera Next) specifically. The second part of the review focuses on the literature about increasing consumer value by intrinsic and extrinsic product attributes. This latter topic provides insights into implementing and enhancing the beauty culture from consumers’ point of view. The third and final paragraph of this chapter tries to synthesize findings from both literature streams and makes them applicable to the scope of this research project.
2.1 Introduction brand extension review
Firms in the fast moving consumer goods (FMCG) industry frequently introduce new products in the market. The majority of these new products are brand or line extensions because extending brands is deemed to be more profitable. It is assumed that well-known require less new product introduction expenses (Collins-Dodd and Louviere, 1999). Furthermore, brand extensions can capitalize on the equity of core brand (Aaker and Keller, 1990) and can enhance consumers’ perceptions of core brand values and image through increased communication (Tauber, 1981). However, there are also various disadvantages of extensions since they can potentially dilute the brand equity of the core brand (Aaker and Keller, 1990). Next to that, they can create confusion or negative connotations in consumers’ mind and harm core values (John, Loken and Joiner, 1998). Moreover, 84% failure rates among brand extensions (Ernst & Young and AC Nielsen 1999) show that the strategy is less certain than often expected by brand managers.
Considering brands are one of the most important assets of FMCG firms, it is highly interesting to investigate how to leverage the current brand associations and minimize the risk of dilution (Martínez, Montaner en Pina, 2009). These latter findings indicate the importance for Unilever to take the brand extension success drivers into account when launching Fair & Lovely Forever Glow (project Hera and Hera Next) and shows the
relevance of this literature study for the present research project.
2.2 Extension definitions
The first step of this review is to get a clear understanding of the concepts that are used. In literature, the definitions ‘line extension’ and ‘brand extension’ are frequently used interchangeable and both concepts have been given a variety of definitions. Not only scholars, but also practitioners are not consistent in the use of brand and line extension definitions, this is demonstrated by the following example provided by Ambler and Style (1997):
“The launch of a new range of flavours by the premium ice-cream brand Haagen-Dazs (i.e. same brand, same category) was labelled the brand’s first ‘brand extension’. In contrast, the launch of P&G’s Oil of Olay Hydra-Gel, a moisturizer like the original range of products (i.e. also same brand, same category) was labelled a ‘line extension’.”
Scholars conducting studies in the field of extensions often elaborate on the definitions in the first part of their paper. Ambler and Styles (1997) for example adapted and refined the model of Tauber (1981) by categorizing the firm’s growth opportunities using two dimensions: product category and brand name. The model in figure 3 is clear about the differences between a brand extension and a line extension. Taking this model into account, project Hera and Hera Next are line extensions of the Fair and Lovely brand because the product are launched in the same product category. However, other researchers have other visions of the definitions. Fahrsquar (1989) for example describes two types of extensions;
a) An existing brand name that is applied to a product in one of the firm’s existing categories, is a line extension (e.g. Fair & Lovely introduces a new type of facial whitener).
Product Category
New Existing
Brand name
New New Brand Flanker Existing Brand Extension Line
b) An existing brand name that is applied to a product in a category that is new to the firm, is a
category extension (e.g. Fair & Lovely introduces
a new type of make-up).
Although most researchers describe the differences between the concepts these differences are often not taken into account during the actual study. When a researcher for example investigates to what extent an extension influences the parent brand equity, both line- and brand extensions are taken into account without distinguishing the two definitions. Therefore, for this study it is chosen to use Kotler’s (1991) encompassing definition. Based on the following definition, project Hera and Hera Next are brand extensions of the brand Fair and Lovely;
Brand extensions include any effort to extend a brand by launching new or modified products in new or existing markets by using the same brand name.
2.3 Brand extension evaluation and feedback Basically, the brand extension literature can be categorized in two streams. The first stream, labelled as brand extension evaluation, involves all factors and dimensions influencing the consumer’s evaluations of the brand extension (BE). The second stream, identified as brand extension feedback, includes the re-evaluation of the parent brand (PB), after the introduction of the extension. When a BE is launched, there will be a two-way effect. Firstly, there will be a transfer of knowledge and attitude from the PB towards the BE. Milberg, Park, and McCarthy (1997) identified this process by the
forward effect. This forward effect, among other
constructs, encompasses the brand extensions
evaluation and together with various other factors
(discussed in the later part of this literature review) determine if the evaluation is positive or negative. Furthermore, Milberg, et al. (1997) also mentioned the feedback effect, this effect includes the change of the PB attitude based on the evaluation of the BE, this definition overlaps with the brand extension
feedback.
The dual relationship between the PB and the BE is explained by various theories, most of them coming from psychology (Martínez and Pina, 2010). One of these theories is the associative network
theory which implies that evaluation of the BE will
impact initial brand associations post-extension
launch. This theory can explain the feedback effect through the following example; when a consumer sees a familiar brand name on the extension, the memory structures of the consumer about the PB will be strengthened and therefore the extension has direct impact on the PB (Dwivedi, Merrilees and Sweeney, 2009). Moreover, Martínez and Pina (2010) notice that the associative network theory also explains the forward effect, since they demonstrate that the brand image of the extension can be predicted by its PB image. Another psychology theory often used in BE literature is the
bookkeeping model of Weber and Crocker (1983).
This model shows that brand attitudes and beliefs will always change due to the new information from, for example, the BE. This is why, regardless of other factors, a higher accessibility of information about the BE will lead to enhancement of the brand image, whereas lower information accessibility has a negative effect on brand evaluation (Ahluwalia and Gürhan-Canli, 2000).
Taken these findings into account, it should be noticed that the results can change by variation in situational factors. Recent study by Heat, Delvecchio and McCarthy (2011) shows that, according to prior research, the results of horizontal line extensions (e.g. more flavors) have been positive whereas those of vertical line extensions (e.g. introducing a premium or budget line) varied. Based on the variances in effects of vertical line extensions, the authors initiated a study investigating the differences between the effects of middle-quality brands that offer higher-quality and lower-quality vertical line extensions. The study reports an asymmetry in the line extension effect in which higher-quality extensions improve overall brand perception more than lower-quality extensions damage them, the latter sometimes having no effect (Heat et al. 2011). Furthermore, Kim, Lavack and Smith (2001) introduce the concept of distancing
techniques into the BE literature. Distancing
techniques are used to increase or decrease the perceived distance between the core brand and its extension. Contrary to the results of Heat, et al. (2011), their study concludes both up and step-downs extensions have negative impact on the consumer evaluation of the core brand. Their explanation of this negative effect is in line with the
bookkeeping model; as the extensions substantially
differ from its core brand, in price and/or quality, the PB will become diluted. However, Kim et al.
Perceived Fit of Brand Extension Product category similarity Evaluation of Brand Extension Brand image similarity
Figure 4. Perceptions of Fit and its Dimensions
(2001) show that via the use of the aforementioned distancing techniques, this negative impact can be reduced. Greater perceived distance between the PB and the extension results in less harm for the core brand, especially for step down cases of prestige-oriented brands.
2.4 Perception of fit
BE success can be measured on several ways. Market shares, likelihood of trying, profitability and years of survival are variables to measure the successes of the core brand and its extensions. However, the literature review of Grime, Diamantopoulos and Smith (2002) shows that the majority of the extension research does not use these quantitative ways of measuring. In literature, it is widely acknowledged that the success in terms of positive consumer evaluation of brand extensions to a great extent depends on the ´perception of fit´ between the extension and its core brand (e.g. Aaker and Keller, 1990; Park, Milberg and Lawson, 1991). For this reason, Grime, et al. (2002) use the perception of fit in their literature review as the foundation of their framework. This perceived fit involves a categorization process in which the BE is judged by consumers according to the suitability of its membership in a particular category that is established by several products with a certain brand name as identifiable label (Park et al. 1991). Although this theory is already established in the early nineties, more recent, empirical studies and literature reviews still indicate ‘perception of fit’ as the most important driver of BE success (e.g. Völckner and Sattler, 2006 and Arslan and Altuna, 2010).
The fundamental paper of Aaker and Keller (1990) conducts two studies to obtain insights on how consumers form attitudes towards brand extensions. The research is based on consumer surveys and uses hypothetical brand extensions. By the use of rating scales, respondents were asked to rate several success factors (independent variables) and the success of the extension (dependent variable). Based on their findings, three factors of perception of fit are indicated. Summarized, these factors are 1) transferability, or the degree to which the skills to produce and market the extension already exists, 2) substitutability, meaning to which extent the extension product can replace the original one in satisfying the same need and 3) complementarity, dealing with the extent to which
the current product and its extension have the same
usage context. Overall, transferability and
complementarity were more important predictors than the substitutability but all factors contributed to the product category similarity between the PB and its extension. This implies that extensions in the same product category as its parent product (e.g. Axe extents its product line with a body wash) will achieve a higher perception of fit than brands that extend out of their product category (e.g. Axe introduces detergent products).
One year after this study, Park et al. (1991) confirmed these outcomes and contributed to the BE literature by identifying another important factor of perception of fit. Besides the similarity of product category, the authors indicate that consumers also assess fit in terms of concept consistency between the brand image and the extension. Brand concept consistency is clearly a different factor from the product category similarity as it considers how a brand image affects consumers’ perception of fit, rather than how it is affected by the same product features, attributes or benefits (Grime, et al., 2002). These findings indicate that extensions from a certain brand will achieve higher perceptions of fit if these extensions are in line with the values (price, quality, communications) of the PB. Both dimensions and its influence on fit and BE evaluation are presented in figure 4.
Some researchers do criticize the theories presented above because of a non-competitive testing environment (Milberg, Sinn and Goodstein, 2010) or the use of fictitious brand and MBA-students as respondents in experimental settings (Barret, Lye and Venkateswarlu 1999). However, since the early nineties, both dimensions of the perception of fit theory, as presented in figure 4, are tested and confirmed in academic literature by numerous researchers (e.g. Grime et al., 2002; Völckner and Sattler, 2007; Barret et al., 1999; Martínez and Pina, 2010 and Arslan and Altuna, 2010). Furthermore, since various researchers have
been concerned about the external validity of their proposed BE model, Nijssen and Agustin (2005) tested key variables among marketing managers and concluded that the perceived fit also was at the heart of a managers’ mental decision model. Therefore, this study identifies the perception of fit (FIT) as the key variable and most import BE determinant. 2.5 Drivers of brand extension success
The aforementioned literature is fairly unanimous about the direct relationship between FIT and BE success. However, there is academic discussion about other relevant dimensions influencing the brand extensions success. This discussion is characterized by two topics. Firstly, scholars find contradicting results of the actual influence of certain factors. Therefore, this review only provides an overview of success factors that are significantly proven by at least three different empirical studies. Moreover, solely factors that are relevant for extensions of a personal care brand like Fair & Lovely are included. Secondly, most studies hypothesized a direct relationship between the BE success and the potential success factors (independent on dependent variables). Therefore, former research did not take into account that some of the factors may constitute dependent variables in other relationships. For example, according to literature, factor X has a direct effect on BE success. However, it can be that X actually influences Y (another direct success factor) which influences BE success ( X Y BE success). The failure to account for potential relationships among the success factors may lead to false interpretations of the relative importance of these factors (Völckner and Sattler, 2006). Therefore, although this review will not discuss all possible complex relationships, each factor discussed in the next paragraph will highlight possible relationships to other factors.
Subsequently, after a literature review of numerous empirical studies that cover 25 years of extensive BE research effort, this paragraph will discuss various success factors of BE success and summarize all factors and relationships into a theoretical model. Although significant amount of research on this topic is conducted, most scholars only investigated the effects of 2 to 4 factors. Therefore, various independent factors are seldom compared and little is known about the sequence and relative importance of the identified success factors. This motivated Völckner and Sattler (2006)
and Dwivedi, et al. (2009) to rank the potentially relevant factors and divide the large number of factors into highly essential and less relevant factors. This helps brand managers to indentify success factors that they should care about while introducing a BE. Although both studies included different factors in their ranking lists and the sequence of factors do differ to some extent, this review will use both proposed raking lists and discusses the factors from high to lower relevance. Note that FIT is excluded from this overview since this dimensions is extensively discussed in the former paragraph.
2.5.1 Parent brand image and quality
The parent brand (PB) image is closely related to the PB quality. Scholars use both dimensions to measure the same constructs and therefore, this paragraph labels them as one construct and will be further identified as PB image. For consumers, PB image is an important aspect when forming a perception about the extension (Arslan and Altuna, 2010). The forward effect explains why consumers who have strong attitudes towards the PB tend to transfer their attitudes to the BE. Aaker and Keller (1990) conclude that high image of the PB relates with the evaluation of the BE, but only when there is a basis of FIT between the two product classes. More recent studies unanimously indicated that PB image plays a significant role in evaluating brand extensions. However, it is less clear what PB image exactly means and which factors contribute to this dimension.
This review states that PB image is the collection of both product and non-product associations in consumer memory. This memory is developed through a synthesis of various brand signals, such as the brand name, visuals, products, advertisements and even its reputation (Kwun and Oh, 2007). Moreover, various scholars investigated dependent variables of the PB contributing to the BE success. Results suggest that brand extensions will be more successful when (perceived) quality of PB is high (Smith and Park, 1992), PB conviction is high (Kirmani, Sood and Bridges, 1999), the history of previous brand extensions is successful (Nijssen and Agustin, 2005), previous brand extensions are consistent in image (Dacin and Smith (1994) and previous brand extensions are positioned towards the proposed extension (Dawar and Anderson, 1994).
The relationships presented above indicate a direct effect on BE success. Besides these results, interactions between dimensions and mediation effects of PB image are also found. Smith and Park (1992) for example propose that the positive effect of PB image is higher as the marketing power of the firm increases. Furthermore, the PB image has a
direct effect on the PB attitude change and FIT
(Dwivedi, et al., 2010) and Aaker and Keller (1990) state that the PB image moderates the effect of FIT on the BE success. Moreover, the PB image also has an indirect effect since it positively influences the retailer acceptance (Collins-Dodd and Louviere, 1999).
2.5.2 Parent brand experience
The extent to which a consumer knows a brand shows how familiar he or she is with the PB. Familiarity indirectly reflects the experience with a brand. This is in line with findings that consumers tend to buy those products from brands they are familiar with (Arslan and Altuna, 2010). Broniarczyk and Alba (1994) propose that experienced consumers (experts) differ in their reactions to brand extensions from consumers without experiences with the PB (novices). Furthermore, findings of Swaminathan, Fox and Reddy (2001) indicate that PB experience has a significant impact on initial extension trial when the PB experience was positive. Since information from brand experience is self-generated, it is interpreted more trustworthy than information from advertisements. Therefore, PB experience leads to greater knowledge and confidence in the beliefs about the PB and thereby reducing the risks involved in purchasing the BE (Swaminathan, et al., 2001). Although some researcher do not find the relationship between PB experience and extension success (e.g. Martínez and Pina, 2010 and Diamantopoulus, et al., 2005), the former explanation is the reason why this study indicates PB experience as a more important factor than marketing power, a factor that is discussed next.
Again, besides the proposed direct relationship, Grime, et al. (2002) indicate the relationship can be more complicated. Their study addresses that expert users will be more sensitive towards inconsistencies of brand extensions and will have a better idea of whether a potential extension is ‘fitting’ or not. Moreover, novice users tend to assess the brand’s field of competence as being broader and
consequently may accept a extensions with poor or moderate FIT.
2.5.3 Marketing power
Findings of Reddy, Holak and Bath (1994) and Völckner and Sattler (2007) suggest the marketing power of the manufacturer plays a critical role in determine the success of the new extension product. Firstly, the marketing power of a company can be identified by the company size (is it one of the largest firms in the industry). Secondly, the firm’s marketing competencies (e.g. marketing and selling experiences and distribution advantages) are often key for successful implementation of a brand strategy. In the context of extensions, Reddy et al. (1994) state that marketing competencies are conceived in terms of past efficiency and effectiveness in managing brands. Therefore, effectively managed brands in the past can be a good indicator of the firm’s marketing competencies. Lastly, Bambauer-Sachse, Hüttl and Gierl (2011) prove that it is more likely that consumers do accept moderately or low fitting brand extensions if the advertisement of the extensions highlights the FIT to the PB. More generally, if the brand name is well supported by advertisements (above the line activities) it is more likely the BE will become a success.
Whereas the above mentioned researchers find a direct relationship, Völckner and Sattler (2006) positively tested an indirect, mediating relationship of marketing power towards a) the perception of fit and b) the retailer acceptance. Overall, the marketing power is highly relevant for this study since it is under direct control of Unilever’s brand management and contrary to the former two factors, it can be influenced in the short term.
2.5.4 Retailer acceptance
Success of brand extensions is more likely when the product is well supported in terms of distribution and widely available in supermarkets and drugstores. Nijssen (1999) concludes that higher retailer power dampens an extension’s chance of success. Based on this result, Völckner and Sattler (2006) state that a brand extensions is more successful if the retailer acceptance is high. Furthermore, Rijssen (1999) proposed that retailers have become more sceptical towards late entrant’s
contribution to filling consumer needs. This finding is of significant importance for Unilever since, as mentioned earlier, Forever Glow of Fair & Lovely is a late mover in the facial skincare market.
Fortunately, the manufacturer can influence the retailers’ acceptance on various ways. Collins-Dodd and Louviere (1999) for example state that previous research has shown the positive effects of trade and slotting allowances on retailer acceptance of new products. Furthermore, Völckner and Sattler (2006) suggest that consumer advertising and high PB quality also contribute to the retailer acceptance. Finally, retailers want to avoid having an incomplete assortment and therefore, high levels of FIT between extension and PB enhances the importance of listing the new extensions to maintain store reputation. This initiates a positive relationship between the perception of fit and the retailer acceptance.
2.5.5 Other brand extension dimensions
Whereas the present study indicate parent brand image and quality, parent brand experience and familiarity, marketing power and retailer acceptance as high relevant factors, this paragraphs discusses three factors which are nominated as the less relevant factors of BE success. Although less likely, these dimensions can still contribute significantly to BE success, depending on situational factors as discussed before. Firstly, Nijssen and Bucklin (1998) propose in their paper that a low level of perceived
risk and the importance of the purchase decision in
the extension’s product category, contributes to the success of BE. For Fair & Lovely this factor can be more relevant than generally expected since skincare products are labeled as high interest products. This means, personal care consumers do not want to risk a bad buy. Secondly, Martínez and
Pina (2010) find a minor effect of consumer
innovativeness on the success of BE. In other words,
it is more likely that consumers who are comfortable with taking risks will try and buy an extended product. Interesting findings by Xie (2008) and Klink and Smith (2001) highlight that innovative consumers prefer extensions with a poor fit. Therefore, the effect of fit on BE success will be higher when the consumer innovativeness is low. The third dimension comes from a study dealing with mental decision-making models of brand mangers by Nijssen and Agustin (2005). Findings from in-depth interviews and discussions with the respondents showed that the added value of the extension also played an important role in BE preference. Brand extensions need a sustainable advantage from a consumer vantage point in order to be successful in the long term.
2.5.6 Theoretical model
Based on the literature review on BE and its success factors, the theoretical model in figure 5 is constructed. The right side of the model represents the influence of the most important dimension; perception of fit (FIT), consisting of product category similarity and brand image similarity. As presented before, numerous researchers confirmed the direct effect of FIT on BE success. However, together with the BE success (feedback effect), FIT also influences the attitude of the PB. The left side of the model presents other BE success drivers. Völckner and Sattler (2007) examine the robustness of success drives and their results show that the first four factors in the model (in bold type) can be generalized among (a) lab settings and real extensions, (b) across various FMCG categories, (c) across different types of parent brands, (d) between
Parent brand attitude change Brand extension success drivers
1) Parent brand image and quality 2) Parent brand experience and familiarity 3) Marketing power 4) Retailer acceptance 5) Perceived risk 6) Consumer innovativeness 7) Added value Perceptions of fit
- Product category similarity - Brand image similarity
BRAND EXTENSION SUCCESS
student and non-student respondents and (e) between attitude and market-based success measures. The latter three factors presented in the model (5-7) are less relevant but can still influence significantly depending on situational factors like
horizontal/vertical and step-up/step-down
extensions. The former paragraphs extensively discuss the BE success drivers and indicate that besides a direct effect, various scholars also propose and find indirect, moderating or even interrelational effects on BE success, FIT or the relationship between the two. This can be explained by the following example; beside a direct effect of marketing power on BE success, prior research finds marketing power FIT retailer acceptance BE success. Moreover, to make it even more complex, Völckner and Sattler (2006) find moderating interactions between e.g. the FIT and PB quality (FIT x PB quality). However, these moderating relationships show an incremental variance compared to the direct and indirect factors. This means, the moderating effect plays a relatively minor role in the model.
It is hardly impossible to include all complex relationships proposed in literature in one theoretical model and therefore the presented model does not go in-depth on all relationships but proposes an overall effect of the factors on the left side on the dimensions on the right. More specifically, the model shows that BE success drivers have a) a direct effect on the perception of fit (and the other way around), b) have a mediating effect relationship between FIT and BE success and c) have a direct effect on the BE success. Drivers of BE success can be taken into account at the solution designs section of this report.
2.6 Introduction customer value review
The interest of both academics and professionals in customer value focused strategies is increasing in recent years. Grounded on fundamental marketing principles, the concept of customer value has been revised and refined by scholars for the last 30 years (Gallarza, Gil-Saura and Holbrook, 2011). Among others, Wyner (1996) conclude that marketing strategists and economics emphasize that creating customer value is key for the long-term success for companies. Customer value is central to competitive advantage (Khalifa, 2004) and therefore, most strategy models acknowledge the importance of the concept (Cravens, Greenley, Piercy and Slater, 1997).
Despite relevance of the concept is wide-spread recognized, research efforts have been
criticized for inadequate definitions and
conceptualizations (Gallarza et al., 2011).
Furthermore, the concept of value is one of the most overused and misused concepts in social sciences (Leszinski and Marn, 1997). Therefore, this review starts with an explanation of the different categories of values.
2.7 Categories of value
Overall, management literature studies can be clustered around three categories of value. Firstly, the shareholder value, this category deals with the belief that company strategies that create the greatest value will develop the highest sustainable competitive advantage. Therefore, these type of companies will deliver more value towards the shareholders. Secondly, literature about stakeholder
value shows that the companies have responsibilities that go beyond shareholder value and encompasses other stakeholders such as employees, supplier and consumers (Barsky, Hussein and Joblonsky, 1999). The third category is
customer value. Grönroos (1997) already mentioned
that shareholder value comes from profitable consumer relationships and not from the stock exchange. Moreover, the study of Hesket, Sasser and Schlesinger (1997) shows that creating value for customer forms a reinforcing cycle of superior value for both employees and investors. In other words, it can be concluded that customer value is the basis for all other company value and an umbrella term for the other two categories. Therefore, the next paragraph elaborates on this important definition and shows various angle-views and vantage points of the concept. The second part will discuss an integrative model of value by highlighting several models of customer value. The final section provides relevant managerial implications regarding the present research project.
2.8 Defining customer value
It is important to note upfront that the differences in Unilever’s terminology between customer and
consumer does not exists in the value literature.
Within Unilever, the consumer represents the actual shopper whereas the retailers are indicated as
customers. Within the value literature both
definitions mean the same; the end-user of the product. To avoid confusion, this literature review
will not mix up the two definitions and follows Unilever’s terminology. Therefore, from now on, customer value will be labelled as consumer value.
Fortunately, scholars in literature generally agree the consumer value (CV) is determined by consumers’ perceptions and not by suppliers’ intensions (Zeithaml, 1988). CV is what the consumer gets out and not what the suppliers puts in. Zeithaml (1988) wrote a top-cited article and her definition of CV is commonly used; ‘...the consumers
overall assessment of the utility of a product based on perceptions of what is received and what is given’.
Other scholars define the perceived value as much more complicated and propose a multidimensional construct in which a variety of notions like price, quality, benefits and sacrifices are included (Sánchez-Fernández and Iniesta-Bonillo, 2007).
Several recent studies tried to get grip on the complexity that is inherent in this area of research by proposing multidimensional constructs of CV. Woodall (2003) conducted an attempt and proposes five distinct dimensions of value including a) net value, a utilitarian balance of benefits and sacrifices, b) marketing value, concerned with product attributes alone, c) derived value, deals with all outcome related value, d) sale value, including low price or reduction of sacrifices and e) rational value which expresses value in units of exchange. Furthermore, this study categorizes the moments of value offering in pre-purchase, transaction, post-purchase and disposition value. Another attempt by Lindgreen and Wynstra (2005) divides the field of CV in two major research stream; the value of goods and the value of services. Since this research project deals with products, this review will focus on studies dealing with product-related CV. Although the above explained work of Woodall (2003) provides relevant insights, this paper will elaborate on the multidimensional approach of Khalifa (2004) because his paper offers an integrative configuration of value that is better applicable to FMCGs like Fair & Lovely and other personal care products.
2.9 Integrative framework of CV
The review on CV literature by Khalifa (2004) pulls different streams of value research together and tries to incorporate them into a useful, coherent and practical framework. Based on this framework the current state of the research and possible gaps can be indicated and therefore it is proper input for this literature review.
Generally, scholars try to explain CV by the use of three different models: 1) value component models (e.g. Thompson, 1998), 2) benefit/costs ratio models (e.g. Leszinski and Marn, 1997) and 3) means-end models (e.g. Zeithaml, 1988). In his approach to create an integrative CV model, Khalifa (2007) mentions that the three models, taken separately, are incomplete and their usefulness is limited. On the other hand, the models do overlap each other’s domain. The models will be explained in the following paragraphs and it will be displayed why the means-end model is most applicable for the particular research project.
2.9.1 Value component models
Models and theories that try to explain the various type of values can be clustered in this category. These value component models focus on the want, worth and need of the consumer. Kaufman (1998) defines these elements as follows; the want invokes the buyer’s desire to own the product, the worth explains the interest for the buyer and how it will be used and the need describes the functionality and physical features of the product. This approach overlaps with the idea to take consumer’s perception of value into account. Thompson (1998) explains that from the consumers point of view, value features of products can be dissatisfies, satisfiers or delights. Dissatisfies are features that are expected to be present, satisfiers are explicitly requested to meet consumers needs and delights are features that consumers do not expect which can lead to positively (or negatively) surprises.
As mentioned above, the value component model approaches the CV from a consumer perspective. This method is highly applicable to improve services with many consumer touch points (e.g. airlines, theme parks or restaurants) but has its limitations for supermarket goods like Fair & Lovely. This can be concluded since the model focuses on the consumer point of view and pays less attention to the actual delivery of the service/product and the relationship between the consumer and supplier (Khalifa, 2007). Finally, the model disregards the offering and sacrifices from consumer side to complete the purchase.
2.9.2 Benefit-costs ratio models
Whereas the value component model does not take into account the costs of offering value, the basis of this model is the trade-off between the costs and
Figure 6. A Means-End Model. Adapted from Zeithaml (1988) .
value. This value equation deals with the relation between consumer perceived benefits and consumers perceived sacrifices incurred (Leszinski and Marn, 1997). The following value equation, designed by Grönroos (1997), is often used by scholars to describe consumer perceived value (CPV):
CPV = Total benefits / Total sacrifice
In this equation, the benefits for consumers can be expressed in tangible and intangible benefits and the sacrifices include monetary and non-monetary factors. The benefits-costs ratio models advocate the trade-off between the total perceived value and the total perceived costs of an offering should be positive. Huber, Herrmann and Morgan (2001) suggest that relevant costs (sacrifices) of a purchase include monetary costs, time costs, search costs, learning costs, emotional costs and efforts coupled with financial, social and psychological risks.
Findings of Khalifa (2004) implies that benefits-costs models are broader than the value component models because it considers CV in a longer time horizon prospective and includes almost all facets of the consumer activity cycle. The limitation of these models is however its static
characteristic. It does not pay much attention to building value which is of high relevance for this research project. To enhance the beauty culture of Unilever personal care products, the firm should somehow increase the total value of the beauty products. For fulfill this objective, this chapter will continue with the elaboration of the means-end theory.
2.9.3 Means-End Theory
Although the models discussed in the former paragraphs provide a comprehensive overview of prior literature, they are a) less suitable for consumer products and b) based on rather abstract principals and theoretic relationships. The means-end theory initiated by Zeithaml (1988) has a more concrete and practical design (see figure 6). Its managerial applications are applicable to the business opportunity of this research project. The means-end theory (MET) is widely acknowledged among numerous scholars and often used to analyze aspects of consumption behavior for retail products (e.g. Baker, Thomson and Engelken, 2004 and Manyiwa and Crawford, 2002). The MET posits that decision-making processes regarding consumption are influenced by a) linkages among product
consumption and c) personal values of consumers. The intention of Zeithaml’s (1988) study was to define and relate the definitions price, quality and value in a comprehensive model. In order to achieve this, the model of Dodds and Monroe (1985) is adapted towards findings from exploratory investigations. Her adapted model is displayed in figure 6. The model depicts a three-level-hierarchy of variables which are established according to their level of abstraction. Overall, MET shows the relationship between the perceived quality, perceived price and perceived value and it emphasizes consumers evaluate products on the basis of perceptions of these factors instead of the objective attributes. Generally, the concept of perceived price used in MET can be compared with the explanation of price in the benefit-costs model. The other two concepts – perceived value and perceived quality – will be discussed next.
In literature, there is a lively discussion about the differences between quality and value. Zeithaml (1988) is clear about the quality-value relationship and she states value differs from quality in two ways. Firstly, value is more individualistic and personal and secondly, value has a higher-level concept than quality. Perceived quality and perceived value are influenced by intrinsic and extrinsic product attributes which are indicated as lower-level attributes. Intrinsic values are posited as attributes that are part of the physical composition of the product and cannot be changed without changing the nature of the product itself. Contrastingly, extrinsic attributes are related to the product without being part of the product itself. Brand name, TV-commercials and level of in-store executions are examples of extrinsic attributes to quality.
Another dimension of the model is perceived quality. This factor can be explained by four concepts. First, perceived quality is different from the objective quality. Objective quality is the actual technical superiority or excellence of a product which, according to some scholars, does not exists because all quality evaluations are subjective. Secondly, perceived quality is a high level abstraction. The low level abstraction is a functional product attribute and this attribute needs to be translated to the emotional payoff like perceived quality. Thirdly, the perceived quality in some cases is similar to attitude. Lutz (1986) stated this affective quality will be more likely for services and
nondurable consumer goods where the experience is more important. Lastly, the evaluation of quality will usually take place in a comparisons context (Zeithaml, 1988) and therefore be made within the consumer’s evoked set.
2.10 Consumer value implications
Findings from the CV literature and a proper understanding of what quality and value means to consumers, offers the opportunity for managers to improve brand positions (Zeithaml, 1988). Managers can use the models to improve, extend or expand product benefits by enhancing the core values, add new values or change the product or service from a solution to an experience.
Two important dimensions of MET are the intrinsic and extrinsic product attributes from a consumers point of view. Marketers should find out which of the many attributes really contribute to the quality and value perception of consumers. Situational factors during purchase and use of the products are highly relevant for this investigation. Both Zeithaml (1988) and Khalifa (2004) provide numerous implications for managers. This review will summarize these implications by taking into account the applicability of the implications for FMCGs like Fair and Lovely and other personal care products;
Identify important intrinsic and extrinsic
attributes (product package, in-store displays);
Align strategies with changing expectations in
evolving market;
Provide information about quality before
purchase (by ads or displays on the shelf);
Educate consumers on how to evaluate quality;
Decrease non-monetary price by increasing ease
of use (e.g. improve on package);
Focus on psychic and intangible needs.
Treat the consumer as a person and build a
relationship (satisfy different skincare needs). These practical recommendation easily fit the value build-up model presented in figure 7. Implementing these recommendations will bring a product or brand to the upper right corner of this figure. The model depicts CV is affected by four factors. Khalifa (2004) states the first to factors concern whether the consumer is treated like a consumer or more respectfully, as a person and whether the ‘deal’ is part of an interaction or just a
